TheRealReal teams up with Neiman Marcus

The RealReal, an online consignment store, has developed a partnership with Neiman Marcus stores to help department store clients recycle their designer apparel and they can opt to be paid with Neiman Marcus gift cards rather than cash. less

The RealReal, an online consignment store, has developed a partnership with Neiman Marcus stores to help department store clients recycle their designer apparel and they can opt to be paid with Neiman Marcus ... more

Photo: Courtesy Of The RealReal

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The RealReal, an online consignment store, has developed a partnership with Neiman Marcus stores to help department store clients recycle their designer apparel and they can opt to be paid with Neiman Marcus gift cards rather than cash. less

The RealReal, an online consignment store, has developed a partnership with Neiman Marcus stores to help department store clients recycle their designer apparel and they can opt to be paid with Neiman Marcus ... more

Photo: Courtesy Of The RealReal

TheRealReal teams up with Neiman Marcus

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It’s an elegant solution to an elite problem: A San Francisco online consignment site called The RealReal and Neiman Marcus have announced a two-pronged partnership in which the luxury department store will help customers recycle their used designer clothing on the Internet and consignors can opt to be paid in Neiman Marcus gift cards instead of cash.

Founded in 2011, TheRealReal.com verifies that used designer goods are authentic and helps consignors to sell them online. The company, which expects to pay its consignors $100 million for the resale of luxe apparel by the end of 2015, says the partnership could pump an estimated $40 million into Neiman Marcus coffers next year. That’s because a survey of The RealReal’s consignors showed that 40 percent said they would prefer a gift card to a luxury retailer over other forms of payment.

A six-month pilot program in six Neiman Marcus stores showed a change in consumer behavior that led to the partnership.

Customers who consign return to the store to spend their gift cards not only to buy, but to “buy up — to buy more expensive things — because they know they have a chance to resell it,” said Julie Wainwright, chief executive officer of The RealReal. “Their customers appreciate the service and their customers are spending more money if they know they can consign the goods when they’re done. It’s a whole new way of looking at luxury goods, and Neiman’s understood that very quickly.”

Consignors who sign up with The RealReal can send specific brands of used women’s or men’s apparel to the company or request a pickup, if geographically feasible. The company gives the consignor an estimate of the item’s selling price, and the consignor pockets 60 percent of that price for the first $7,500 worth of clothing that he or she sells in a single year. After that, the consignor is given 70 percent of the selling price. The average consignor makes $8,500 a year and is paid by direct deposit or check, Wainwright said.

Six months ago, The RealReal tested a program in six Neiman Marcus stores in which sales associates began reaching out to their clients, explaining how The RealReal works and offering to come to their homes to sort through their closets to find clothing to consign online — a way to recycle and to make space for next season’s wardrobe.

As of July 22, the program will operate in 34 Neiman Marcus stores nationwide, including San Francisco, Palo Alto and Walnut Creek, with signs and postcards at cashier stations alerting customers to the program.

Consignors who register with the web site receive a kit stating which designer labels are accepted — some brands hold their value better than others — Chanel, Hermès and Louis Vuitton, to name a few.

“A Chanel bag you can resell for 80 percent of the value if it’s still in good shape,” said Wainwright. “Once customers start seeing those numbers and they see the data themselves, it changes the way they shop and the way they view those items in their home.”

Brands not currently listed on the site might come back in a month or two, she said. That’s because trends come and go.

“Two years ago, we had a hard time selling Manolos for a good price,” she said, referring to Manolo Blahnik, a women’s shoe line. “Everyone wanted platform, platform, platform. Now everyone wants the type of shoe Manolo does, so the price has gone up. Our business looks very much like what’s going down the runway, what brands are trending.”

Wainwright said The RealReal is in talks with Saks Fifth Avenue on a project, but declined to elaborate furtner.